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(NEW YORK) — The White House announcement Tuesday that the U.S is taking the rare step of releasing oil from the nation’s strategic reserve in an attempt to lower gas prices comes as inflation-battered Americans are feeling the pinch at the pump ahead of Thanksgiving travel.

While the news could bring relief of five to 15 cents per gallon in the coming days and weeks, industry experts told ABC News, they remain skeptical about whether the move will ease longer-term pressures in the oil market and concerned over how oil producers could punitively respond.

The announcement that the U.S. will disperse 50 million barrels of crude oil from the Strategic Petroleum Reserve — a complex of four sites with deep underground storage caverns created in salt domes along the Texas and Louisiana Gulf Coasts — comes as gas prices hover near a seven-year-high for this time of year, largely due to supply-demand imbalances wrought by the pandemic. The White House is taking action, meanwhile, amid soaring gas prices seen as hurting President Joe Biden’s approval ratings.

“It’s very much political,” Patrick DeHaan, head of petroleum analysis at the fuel price-tracking site GasBuddy, told ABC News of the release. “We’ve never used the Strategic Petroleum Reserve merely to to bring prices down.”

The 50 million barrels of oil the U.S. plans to release represents about one-twelfth of the total in the Strategic Petroleum Reserve. Historically, the U.S. has tapped into this reserve in response to immediate disruptions in oil supply, like hurricanes.

“The SPR has historically been there as a strategic use in case of disruption,” DeHaan added. “It presents a bit of a slippery slope that now it’s going to be used politically, to improve a candidate’s reelectability or potential.”

“That’s why Biden feels so much pressure, Americans are feeling pressure, gas prices are at their highest they’ve been this time of year in seven years,” he said. “But it also puts the nation at further risk in case OPEC decides it wants to cut oil production or, in fact, the increase from the SPR could draw OPEC’s ire and cause them to lower the restoration of oil production.”

A senior administration official, citing a low global supply of oil that is contributing to driving up fuel costs, said the decision was made to ease costs on American consumers as pressures between demand and the easing of the pandemic create unique conditions.

During remarks on Tuesday, Biden said he was “announcing that the largest ever release from the U.S. Strategic Petroleum Reserve to help provide the supply we need as we recover from this pandemic.”

“This coordinated action will help us deal with the lack of supply, which in turn helps ease prices,” the president said. “It will take time, but before long, you should see the price of gas drop where you fill up your tank.”

As the global economy recovers from the COVID-19 shock, oil demand is surging and more travelers are hitting the road and taking flights, causing demand for gas — and prices — to rise at a rapid clip. At the same time, the supply and production of oil has not kept up with increased demand. OPEC+, a conglomerate of the world’s biggest oil producers, has resisted repeated calls by the White House to boost global production.

“At the end of the day, this is a short-term Band-Aid,” said Jeff Kilburg, the chief investment officer at Sanctuary Wealth, told ABC News.

He added crude oil prices have come down in recent weeks, in part in anticipation of an announcement that the U.S. and other countries would tap into oil reserves. But after the White House formalized the news Tuesday, crude futures actually traded higher.

“This was a surprise that everyone saw coming,” Kilburg said.

Longer-term price drops are more dependent on boosting global oil production, he added.

President Biden, meanwhile, put the blame on “gas supply companies” for the prices at the pump staying elevated.

“The fact is the price of oil was already dropping prior to this announcement and many suggest in anticipation of the announcement,” Biden said during his Tuesday remarks. “The price of gasoline in the wholesale market has fallen by about 10% over the last few weeks. But the price at the pump hasn’t budged a penny. In other words, gas supply companies are paying less and making a lot more. And they do not seem to be passing that on to the consumers at the pump.”

How and when will this affect gas prices?

Typically, prices at the pump lag crude oil prices by a couple of weeks, but GasBuddy’s DeHaan said speculation that this announcement was coming had already been driving crude oil prices down over the past week.

DeHaan said he expects this announcement to bring down gas prices by some five to 15 cents per gallon depending on the state, and most Americans should start seeing this at the pump “in the next couple of days” or weeks at most.

As of Tuesday, the national average gas price in the U.S. was $3.403 per gallon for regular gas, according to American Automobile Association data. A week ago, that figure was $3.411, a month ago it was $3.382, and a year ago — as the pandemic raged — it was $2.109.

This relief Americans will see as a result of this announcement, however, will likely be “underwhelming,” according to DeHaan, and not a long-term solution.

“I’m not sure that national [gas price] average will drop as much as what Biden had intended or hoped for,” he said.

DeHaan also said there was some “accounting maneuvers” being used in that of the 50 million barrels released, 32 million barrels are going to be “exchanged.”

“That is, oil companies can take delivery now and it’s like an ‘IOU,’ they have to replenish them later,” he said. “Which is not necessarily an outright gain to supply because they have to replenish that.”

The biggest threat of this announcement is that OPEC+ has already hinted at the fact that it may limit future production increases to offset the U.S. and other countries strategic reserve releases, DeHaan added.

“Prior to this SPR announcement, I would have expected that OPEC increases in production that they’ve been doing monthly would have brought meaningful relief by early- to mid-2022,” DeHaan said. “But now, I think that might be threatened if OPEC responds.”

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(NEW YORK) — Macy’s is turning some of the iconic balloon designs from its annual Thanksgiving Day parades into non-fungible tokens (NFTs), some of which will be auctioned to benefit the Make-A-Wish foundation.

NFTs have become adopted by the mainstream and are especially popular among budding digital art collectors.

Macy’s first-ever NFT series is launching in celebration of its 95th annual Macy’s Thanksgiving Day Parade, which is returning in full-swing this year after pandemic restrictions curbed some of its excitement last year.

“As we celebrate our rich legacy, 95 years in the making, we were struck by the unique place the Parade holds in pop culture, always evolving and reflecting the greatest characters and artists of each generation,” Will Coss, the executive producer of Macy’s Thanksgiving Day Parade, said in a statement.

“To celebrate that history, we created art in a new form through NFTs that would bring the magic of the Parade to a new generation while raising funds for our partner Make-A-Wish,” Coss added.

The NFTs are based on Macy’s archival content and balloons that have appeared over the parade’s nine-decade history. They are being designed by a digital art agency REOMETRY.

Starting last Friday and going through Nov. 30, Macy’s is auctioning 10 of its unique NFT designs, and 100% of the proceeds generated from these 10 digital collectibles will go toward benefitting Make-A-Wish, a group that grants life-changing wishes for children with critical illnesses.

Macy’s is also dropping an additional 9,500 free generative NFTs, featuring past parade balloon designs, that will be available on a first-come, first-serve basis starting at 10 a.m. ET on Thanksgiving Day. The auction and NFT drop can be accessed at macys.com/NFT.

Bids on some of the 10 NFTs up for auction have already topped $5,000 as of Tuesday.

The NFTs are powered by the platform Sweet and built on the Polygon blockchain. Even if the free NFTs are sold by fans in the future, 10% of any sales generated will be donated to Make-A-Wish, in perpetuity, using the blockchain technology.

NFTs have exploded in popularity amid the pandemic, creating an entirely new marketplace in recent years for digital collectors. Many recent NFT sales have garnered eye-brow raising sums. An NFT of Twitter CEO Jack Dorsey’s first-ever tweet fetched some $2.9 million in March. A collage by digital artist Mike Winkelmann, known as Beeple, fetched a whopping $69 million when it was auctioned as an NFT by Christie’s.

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(BATTLE CREEK, Mich.) — Negotiations are resuming on Monday between Kellogg Co. and the union representing some 1,400 cereal plant workers who have been on strike for more than six weeks.

The workers, who have been striking since Oct. 5, are being represented by the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM). Talks between union leaders and Kellogg’s fizzled early in November after the two sides failed to reach an agreement and further negotiations were put on hold for weeks before Monday’s meeting.

The ongoing strike involves Kellogg’s plants across four states and comes amid a spate of work stoppages hitting the private sector in the U.S. Unique labor market conditions in the wake of the COVID-19 shock to the economy, including record-high levels of workers quitting their jobs, have been linked to new employee activism in recent weeks.

“We look forward to getting back to the table and are committed to negotiating in good faith,” Kellogg’s said in an update Friday. “We remain hopeful that we can reach an agreement soon so our employees can get back to work and back to their lives.”

The union rejected a proposal from Kellogg’s on Nov. 4, saying in a statement at the time that the company’s “last, best and final offer does not achieve what our members are asking for; a predictable pathway to fully vested, fully benefitted employment for all employees with no concessions.”

“The company came to the table insisting that there will only be an agreement if the Union accepts the company proposal exactly as it has been written,” the union’s statement added. “The company’s proposal was filled with conditions and terms as to what was acceptable to Kellogg’s. These terms and conditions are unacceptable to our members.”

After the union rejected the proposal, Kellogg said it was continuing operations at the four plants where the workers are on strike with hourly and salaried employees and “third-party resources producing food.”

“The bottom line is that our proposals address what the union has told us are their primary concerns,” Ken Hurley, Kellogg’s head of labor relations, said in a statement. “The union does not seem interested in revising its proposals or exploring creative solutions to resolve issues.”

The union and Kellogg’s did not immediately respond to ABC News’ request for further comment.

The striking workers in Michigan, Nebraska, Pennsylvania and Tennessee help produce Kellogg cereals including Rice Krispies, Raisin Bran, Fruit Loops, Corn Flakes and Frosted Flakes, according to the union.

A separate strike at agricultural machinery giant John Deere ended just last week after waging on for over a month. The new agreement gave John Deere workers an $8,500 signing bonus and a 20% increase in wages over the life of the contract, among other things, in a deal some say highlights the new power workers are seizing in a post-pandemic labor market.

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(WASHINGTON) — President Joe Biden announced Monday he will nominate Federal Reserve Chairman Jerome Powell to a second four-year term amid new concerns about controlling inflation and took the opportunity to respond to those who have voiced opposition to Powell’s nomination.

“As chair, Jay undertook a landmark review to reinforce the Federal Reserve’s mission towards delivering full employment, for making strong progress towards that goal now, and I believe Jay is the right person to see us through and finish that effort while also addressing the threat of inflation and what it poses to our economies and families,” Biden said at an afternoon event at the White House alongside his nominees.

“Now some will, no doubt, question why I’m renominating Jay when he was the choice of a Republican predecessor. ‘Why am I not picking a Democrat? Why am I not picking fresh blood or taking the Fed in a different direction?'” Biden said.

“Put directly, at this moment of both enormous potential and enormous uncertainty for our economy, we need stability and Independence at the Federal Reserve. Jay’s proven the independence that I value in the federal — in the fed chair. In the last administration, he stood up to unprecedented political interference and in doing so successfully maintained the integrity and credibility of this institution. It’s just one of the many reasons that Jay has support from across the political spectrum,” he added, before inviting Powell to speak.

Biden also said he would nominate Dr. Lael Brainard, a longtime Federal Reserve official and former Treasury Department undersecretary, to serve as vice chair of the Board of Governors of the Federal Reserve System.

“While there’s still more to be done, we’ve made remarkable progress over the last 10 months in getting Americans back to work and getting our economy moving again. That success is a testament to the economic agenda I’ve pursued and to the decisive action that the Federal Reserve has taken under Chair Powell and Dr. Brainard to help steer us through the worst downturn in modern American history and put us on the path to recovery,” he said in an earlier statement.

The announcement follows recent questions surrounding whether Biden would renominate Powell, a Republican, who was nominated to chair the Federal Reserve in 2017 by then-President Donald Trump. Powell was first nominated to the Federal Reserve Board of Governors by then-President Barack Obama in 2011 before Trump elevated him to succeed Janet Yellen, who now serves as Biden’s treasury secretary.

“Fundamentally, if we want to continue to build on the economic success of this year we need stability and independence at the Federal Reserve — and I have full confidence after their trial by fire over the last 20 months that Chair Powell and Dr. Brainard will provide the strong leadership our country needs,” he added in the statement.

Powell and Brainard both offered brief remarks at the White House, vowing to work on behalf of all Americans to increase the resilience of the economy.

“We understand that our decisions matter for American families and communities,” Powell said of their work at the Federal Reserve. “I strongly share that sense of mission and am committed to making those decisions with objectivity and with integrity based on the best available evidence in the longstanding tradition of monetary policy independence.”

As the president faced mounting political pressure in recent weeks to shake up the leadership by nominating Brainard to replace Powell, he talked with both Powell and Brainard about his decision on Friday, according to a source familiar with the matter.

The president regularly engaged with members and stakeholders around the decision, including with both progressives and moderate Democrats on Capitol Hill, the source said. Biden recently met with Sen. Elizabeth Warren, D-Mass., at the White House to get her input on the decision after Warren had publicly called Powell a “dangerous man” to lead the agency.

“Your record gives me grave concerns. Over and over, you have acted to make our banking system less safe, and that makes you a dangerous man to head up the Fed, and it’s why I will oppose your renomination,” Warren said in a hearing on Sept. 28. She said Monday she will oppose Powell’s nomination.

Biden and his team had also been in regular and close consultation with Sen. Sherrod Brown, D-Ohio, who chairs the Senate Banking Committee, according to the source. Brown said on Monday he would support Powell’s nomination.

Despite Brainard winning over progressives like Warren who argue she is tougher on bank regulation and climate change, by keeping Powell in place, Biden appears to be sending a message reaffirming the central bank’s independence from politics.

“Overall, with Mr. Powell remaining Chair, communication will remain clear and transparent and policy will not veer too far off from the current dovish path,” Rubeela Farooqi, chief U.S. economist at High Frequency Economics, an economic research consultancy firm, said in a statement to ABC News.

The nomination comes at a critical moment for the central bank, which has a mandate to contain inflation and sustain job growth. Powell has tilted “dovish” on inflation in recent months, insisting the run-up in prices will abate as the pandemic recedes and the supply chain untangles.

Powell oversaw a busy time at the Federal Reserve as it pumped unprecedented stimulus into the financial system in response to the pandemic and now starts to unwind some of that stimulus. Wall Street had been betting on his re-nomination as a way to keep continuity in policy at a tumultuous time in the economy.

If both are confirmed by the Senate, the White House will still have several seats to fill on the Federal Reserve Board, including the lead banking supervisor, allowing Biden the opportunity to reshape the central bank in a more drastic way with those picks.

Economists told ABC News they expect swift confirmation in the Senate for the nominees.

“We believe that Biden paired the announcement of the more Democratic-leaning nominee Lael Brainard with the Republican-leaning Jerome Powell to allay objections from the progressive members of the Democratic party,” said Kathy Bostjancic, Oxford Economics Chief U.S. Financial Economist.

Although at least three Democrats have signaled their opposition to Powell’s nomination, at least five Republicans have voiced support — so it appears he will be confirmed but not without multiple Republicans supporting Biden’s nominee. There were nine Democrats, including then-Sen. Kamala Harris, who opposed Powell’s nomination in 2018 when he was confirmed by the Senate in an 84-13 vote.

An aide to GOP leader Sen. Mitch McConnell confirmed that the minority leader is also expected to back Powell’s renomination. Others are likely to follow suit.

Republicans are looking to brand Powell as a source of necessary stability for an economy plagued by inflation and supply chain challenges, something they’ve repeatedly blamed Democrats for.

“In light of an economy hamstrung by COVID-19, and now supply chain issues and soaring inflation thanks to the Biden Administration’s debilitating policies, the Federal Reserve needs consistency,” Sen. Kevin Cramer, R-N.D., said in a statement. “Powell’s appointment is a sign of consistency, which is so important at a time like this. Stability and consistency are in the best interests of the American economy and I look forward to supporting his confirmation.”

ABC News’ Allison Pecorin contributed to this report.

Copyright © 2021, ABC Audio. All rights reserved.

(WASHINGTON) — President Joe Biden announced Monday he will nominate Federal Reserve Chairman Jerome Powell to a second four-year term amid new concerns about controlling inflation.

He also said he would nominate Dr. Lael Brainard, a longtime Federal Reserve official and former Treasury Department undersecretary, to serve as vice chair of the Board of Governors of the Federal Reserve System.

“While there’s still more to be done, we’ve made remarkable progress over the last 10 months in getting Americans back to work and getting our economy moving again. That success is a testament to the economic agenda I’ve pursued and to the decisive action that the Federal Reserve has taken under Chair Powell and Dr. Brainard to help steer us through the worst downturn in modern American history and put us on the path to recovery,” Biden said in a statement.

The announcement follows recent questions surrounding whether Biden would renominate Powell, a Republican, who was nominated to chair the Federal Reserve in 2017 by then-President Donald Trump. Powell was first nominated to the Federal Reserve Board of Governors by then-President Barack Obama in 2011 before Trump elevated him to succeed Janet Yellen, who now serves as Biden’s treasury secretary.

“Fundamentally, if we want to continue to build on the economic success of this year we need stability and independence at the Federal Reserve — and I have full confidence after their trial by fire over the last 20 months that Chair Powell and Dr. Brainard will provide the strong leadership our country needs,” he added.

Biden is expected to speak about the announcement Monday afternoon with Powell and Brainard joining him for the appearance, according to the White House.

As the president faced mounting political pressure in recent weeks to shake up the leadership by nominating Brainard to replace Powell, he talked with both Powell and Brainard about his decision on Friday, according to a source familiar with the matter.

The president regularly engaged with members and stakeholders around the decision, including with both progressives and moderate Democrats on Capitol Hill, the source said. Biden recently met with Sen. Elizabeth Warren, D-Mass., at the White House to get her input on the decision after Warren had publicly called Powell a “dangerous man” to lead the agency.

“Your record gives me grave concerns. Over and over, you have acted to make our banking system less safe, and that makes you a dangerous man to head up the Fed, and it’s why I will oppose your renomination,” Warren said in a hearing on Sept. 28.

Biden and his team had also been in regular and close consultation with Sen. Sherrod Brown, D-Ohio, who chairs the Senate Banking Committee, according to the source.

Despite Brainard winning over progressives like Warren who argue she is tougher on bank regulation and climate change, by keeping Powell in place, Biden appears to be sending a message reaffirming the central bank’s independence from politics.

“Overall, with Mr. Powell remaining Chair, communication will remain clear and transparent and policy will not veer too far off from the current dovish path,” Rubeela Farooqi, chief U.S. economist at High Frequency Economics, an economic research consultancy firm, said in a statement to ABC News.

The nomination comes at a critical moment for the central bank, which has a mandate to contain inflation and sustain job growth. Powell has tilted “dovish” on inflation in recent months, insisting the run-up in prices will abate as the pandemic recedes and the supply chain untangles.

Powell oversaw a busy time at the Federal Reserve as it pumped unprecedented stimulus into the financial system in response to the pandemic and now starts to unwind some of that stimulus. Wall Street had been betting on his re-nomination as a way to keep continuity in policy at a tumultuous time in the economy.

If both are confirmed by the Senate, the White House will still have several seats to fill on the Federal Reserve Board, including the lead banking supervisor, allowing Biden the opportunity to reshape the central bank in a more drastic way with those picks.

Economists told ABC News they expect swift confirmation in the Senate for the nominees.

“We believe that Biden paired the announcement of the more Democratic-leaning nominee Lael Brainard with the Republican-leaning Jerome Powell to allay objections from the progressive members of the Democratic party,” said Kathy Bostjancic, Oxford Economics Chief U.S. Financial Economist.

Although at least three Democrats have signaled their opposition to Powell’s nomination, at least four Republicans have voiced support — so it appears he will be confirmed but not without multiple Republicans supporting Biden’s nominee. There were nine Democrats who opposed Powell’s nomination in 2018 when he was confirmed by the Senate in an 84-13 vote.

ABC News’ Allison Pecorin contributed to this report.

Copyright © 2021, ABC Audio. All rights reserved.

(WASHINGTON) — President Joe Biden announced Monday he will nominate Federal Reserve Chair Jerome Powell to a second four-year term.

“While there’s still more to be done, we’ve made remarkable progress over the last 10 months in getting Americans back to work and getting our economy moving again. That success is a testament to the economic agenda I’ve pursued and to the decisive action that the Federal Reserve has taken under Chair Powell and Dr. Brainard (as vice-chair) to help steer us through the worst downturn in modern American history and put us on the path to recovery,” Biden said in a statement.

“Fundamentally, if we want to continue to build on the economic success of this year we need stability and independence at the Federal Reserve — and I have full confidence after their trial by fire over the last 20 months that Chair Powell and Dr. Brainard will provide the strong leadership our country needs,” he added.

This is a developing story. Please check back for updates.

Copyright © 2021, ABC Audio. All rights reserved.

(NEW YORK) — Prices on household essentials like groceries and gas are climbing at a rapid clip, causing new financial distress for Americans right as they plan their first holiday gatherings since the rollout of a COVID-19 vaccine.

After hibernating out of sight for a generation, inflation has made an insidious and unwelcome return to the U.S. economy — fueled by supply chain snags, a shortage of workers in the service industry and pandemic-era economic policies that aimed to alleviate the financial suffering wrought by the public health crisis.

When the unemployment rate hit double-digits last March, lawmakers rallied to send stimulus money to American households and businesses shuttered for months. The Federal Reserve pulled out all the stops to keep financial markets healthy, flushing them with liquidity and easing interest rates. As the economy reopens, Americans now have a pent-up demand to consume on all the things they couldn’t for the past year — and having spent most of the year at home, many have pandemic savings to do so.

Issues with the global supply chain, coupled with struggles of major companies to find staff, however, means production is unable to keep up with the surging demand. Simplistically, this ongoing supply-demand imbalance is why economists say we are seeing prices rise right now.

Navigating inflation can cause headaches for those buying gifts for or hosting loved ones this holiday season, and can inflict further pain for households with less means to absorb higher prices on essentials.

Here is a look at where consumers are feeling the price pinch as the holidays approach, and what they can do about inflation.

Where are prices rising?

In short, prices are rising across the board, but the biggest jumps are being seen in the cost of energy, gas and used cars. Moreover, online shoppers this year likely won’t see the big holiday discounts they are used to in traditional gift items such as electronics and apparel.

Consumer prices surged at their fastest rate in more than three decades, the Labor Department said last week, reporting a 6.2% jump over the last 12 months in its consumer price index. This was the largest one-year increase since November 1990 for the index, which tracks price stickers on a market basket of everyday goods and services.

Breaking the government’s data down further indicates that the overall price hikes were driven by large increases over the past year in the energy index (a 30% jump) and used cars and trucks index (a 26.4% spike). The gasoline index soared 49.6% over the past 12 months, and the energy services (electricity and gas) index ticked up 11.2%.

While it can be hard for some to wrap their heads around what this data on rising prices means, “It’s a big deal,” Matt Schulz, a personal finance expert and chief industry analyst at LendingTree, an online lending company, told ABC News.

“Most people’s financial margin for error is pretty tiny anyway, then when you factor in inflation, an already dicey situation gets to be even more so,” Schulz said. “When you’re making that budget for your holiday spending, it’s important that you don’t just take your budget from last year and move it forward.”

Americans will likely “see a lot of inflation in things that are really close to home,” Connel Fullenkamp, a professor and director of undergraduate studies at Duke University’s Department of Economics, told ABC News.

“We’ve already seen a lot of inflation at the gas pump,” he said. And as the weather chills, he predicted, “We’re definitely going to see it in the price of heating this winter.”

The inflation we’re seeing now is especially sneaky and unpredictable, Fullenkamp added, because of all the issues contributing to it this year from many different angles.

“I think people are going to be surprised occasionally by big price hikes in certain types of items, especially ones that have been affected by the supply chain issues that a lot of companies are having,” Fullenkamp said. “And those are frankly pretty hard to predict, because for some companies it’s parts that they can’t get, and for some companies, it’s just the cost of shipping, so it’s really going to be difficult to predict, but it is definitely going to cause some sticker shock among holiday shoppers.”

How will inflation impact Thanksgiving plans?

As for how inflation is expected to affect Thanksgiving celebrations, Agriculture Secretary Tom Vilsack said that Americans should expect Turkey Day staples to be up 5% in price compared to last year.

Overall, this means the cost of “large” turkeys “will only cost $1 dollar more than last year,” Vilsack said in a statement Wednesday.

This is in line with DOL’s data, which indicates the price of food at home rose 5.4% over the past 12 months — with the index for meats, poultry, fish, and eggs spiking 11.9%, the beef index soaring 20.1% and the pork index climbing 14.1%.

Consumers should keep these figures in mind as they plan their Thanksgiving menus and celebrations. And with gas prices rising at among the fastest rates, people should also factor that into their travel plans.

“If you’re planning on doing a road trip during the holiday season, gas is probably going to be a good bit more expensive than it was last year and that’s a big deal, especially if you’re traveling a good distance to get to grandma’s house,” Schulz said.

What about online deals on Black Friday or Cyber Monday?

Data compiled by Adobe Digital indicates that holiday shoppers likely won’t see the Black Friday or Cyber Monday deals they are used to in the past while shopping online for gifts this year.

“Consumers are now seeing a double hit to their pocketbooks, with everyday expenses like rent and gas rising, while the big holiday shopping season is going to get more expensive,” Vivek Pandya, the lead analyst at Adobe Digital Insights, said in a statement Thursday. “After 17 consecutive months of online inflation, we are entering a new normal in the digital economy.”

Online prices were up 1.9% year-over-year in October, according to Adobe’s Digital Price Index released Thursday. For comparison, prices in October 2019 were down 6.6% year-over-year going into the holiday season. In early November, discount levels for electronics were at 8.7%, the Adobe data indicates, well below the 13.2% discount level at the same point last year.

In categories like tools and home improvements — popular gift items — prices are up 1.2% compared to being discounted 6.8% at the same time last year. Apparel is up 9.81% year-over-year in October, compared to usually being down 1.08%. Fresh flowers and related gifts are also up 14.14%, the data shows, compared to usually being down by a fraction of a percentage point.

The Adobe Digital Price Index reveals that in all the 18 categories tracked, all but one (books) saw higher prices online this year when compared to the historical averages. Persistent supply chain challenges may be partly to blame, the Adobe researchers say, as consumers saw over 2 billion “out-of-stock” messages while online shopping in October.

All of this is important to keep in mind so Americans aren’t surprised by their credit card bills at the end of the month, experts say.

What can Americans do to protect themselves from inflation this holiday season?

As Americans look forward to celebrating the holidays with their families and friends again this year, experts say it is more crucial than ever to budget, plan and be as thoughtful as possible with purchases. While small increases in everyday items can seem manageable or ignorable, this is one of the biggest dangers of inflation that economists urge Americans to keep their eyes on.

Many Americans now are too young to remember the pain and uncertainty inflation wreaked on the economy in the 1970s, when it snowballed out of control, eating away at the value of savings before a painful correction that led to double-digit unemployment rates in the early 1980s. While policymakers are better-equipped to respond to inflation now and prices are rising under very different circumstances than before, many consumers a generation later are having trouble grasping inflation’s risks.

“I’m in my upper 40s and I don’t ever remember inflation. I was tiny during the gas shortages of the late ’70s and all that,” Schulz told ABC News. “It’s just important to understand that you’re not going to be able to necessarily predict what individual things get more expensive or by how much.”

“The best thing that you can do is just create your budget and assume a certain amount of increase, and just assume that everything that you buy is going to be a little bit more expensive,” he said. “If you end up overshooting, then that’s great, maybe you’ll end up having extra money at the end of the month.”

“But the danger in a time of inflation is when people think that it’s not going to affect them as much as it does, and they find themselves short at the end of the month more before that paycheck comes in,” Schulz added.

Now it is more important than ever to keep close track of how much money is coming in and going out of your household each month, Schulz said, and practice financial planning and building up a rainy day fund to protect as much as possible from unexpected price increases.

Duke’s Fullenkamp added that the new generation of Americans “just don’t have a good feel for how relentless and kind of sneaky inflation is.”

“I think people who haven’t experienced it don’t really have a good feel for how much it can really drive prices up if you let it go long enough,” Fullenkamp said. “That’s the thing that is most threatening to the individual budgets and spending, you take your eye off that ball for very long and then you’ll always be surprised, and in a really bad way, because prices keep going up.”

“One of the things that is most dangerous about inflation is it’s just so darn insidious,” he added. “Once it gets into the system — it does really, eventually, percolate through to everything.”

This is why planning ahead of time and sticking to a budget can help protect Americans from financial pain down the line as inflation sets in.

“Any holiday shopping season, impulse buying is what gets you in trouble,” Schulz said. “If you can take the time to make that list and check it twice, and shop around to look for the best deal that you can get on things, it’s as important this year as ever since we’ve seen prices increase.”

Schulz said it might also be worth looking into things like credit card reward offers if you know you are going to spend a lot this season, adding, “Obviously, you have to use the card wisely, and not just see it as a reason to go crazy spending.”

Fullenkamp noted that the more you can gather information ahead of time and comparison shop, the better. He also recommends keeping an eye on online subscription services that many Americans flocked to during the e-commerce boom of the pandemic, saying, “A lot of people aren’t paying a lot of attention before they buy stuff, and they’re getting shocked after the fact.”

Looking beyond consumerism this holiday season, families who are going to be hit hardest by inflation overall are those living paycheck-to-paycheck or without the extra funds to absorb even slightly higher prices on household essentials. But even for those with savings stashed away, the value of cash will start to erode as a result of inflation, so storing investments in things like high-interest savings accounts, money market mutual funds and inflation-protected bonds could help provide some protection.

Meanwhile, while the stock market historically has responded negatively to inflation — in large part due to uncertainty among investors and other macroeconomic factors — experts say it has also been a good vehicle for long-term investing for those who don’t need to touch their money for a few decades or until retirement.

Finally, as inflation lingers and drives up the prices of some items faster than others, Fullenkamp said consumers should not assume that the cheapest stores during times of low-inflation will still be offering the best prices.

“We might see a return to the to the good old days of more comparison shopping,” Fullenkamp said. “That’s really the best thing to do — is to make sure make sure you’re familiar with what the prices are going to be before you go out and buy.”

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(NEW YORK) — This week marks twenty years since Microsoft unveiled the very first XBox. 

On November 15, 2001, at an event that included a guest appearance from Duane “The Rock” Johnson, then-Microsoft CEO Bill Gates pulled the wraps off the black and green gaming console. Since then the device has been through four generations, each of which have added a myriad of features and garnered huge followings. But the console’s success wasn’t always a sure thing. 

“They were a boring tech company,” says IGN Executive Editor Ryan McCaffrey. “Games were not something you associated Microsoft with.” 

“The company took a huge risk,” says Danny Peña, Games Editorial Lead at G4TV and host of the podcast Gamertag Radio. “They were not a hundred percent sure if the concept was going to be successful or not.”

Early XBox consoles came with Ethernet ports, which supported Microsoft’s online gaming service XBox Live. Launched a year after the original XBox, the service allowed gamers to play with their friends over high-speed internet at a time when many systems still used slower, dial-up connections. 

According to McCaffrey, “with broadband gaming you could just have a better quality game experience, and it really changed everything.” He adds Microsoft was ahead of its competitors when it came to offering faster connection speeds.

“They were well out in front of Sony on this. They were well out in front of Nintendo. And now it’s sort of taken as – taken for granted I’d say.”

As for the games XBox players were interested in, McCaffrey says it’s difficult to separate the success of the XBox from the popularity of its flagship Halo franchise – a series of sci-fi action titles which launched alongside the console in 2001.

“I’ve never experienced a first person shooter like this ever in my life,” says Peña, who was one of the first to play the original Halo: Combat Evolved game at a Microsoft launch event in 2001. “That was the game that put XBox on the map.”

“The original [Halo] was what we call in the games business a ‘killer app,’” says McCaffrey. “You had to have the game, and therefore you had to have the system to play the game on.” 

“There’s an argument to be made – a very good argument – that we would not even be having this conversation if not for Halo. Because the original XBox might not have survived if Halo had not been this incredibly big deal,” he adds.

But the road to the XBox’s 20th anniversary has had its fair share of potholes as well. The controller for the original XBox was widely panned for being too big and uncomfortable to hold. One Twitter user joked it was so large it “had its own weather systems” and “affected tides.” 

Early examples of the second generation XBox “360” were prone to hardware issues. According to a 2009 study, nearly a quarter of the consoles experienced some form of system failure – four times the rate of its contemporary competitor, Sony’s Playstation 3. Reliability problems were so pervasive that Microsoft issued a recall to address the most common failure, nicknamed the “Red Ring of Death” because it caused the ring around the console’s power button to glow red. 

According to Business Insider, the recall is estimated to have cost Microsoft more than a billion dollars.

Over the last two decades, the company has added hardware and software features including things like XBox Live, a motion-tracking “Kinect” system, voice controls, and even a streaming service for games called “xCloud.” 

According to Peña, a theme that distinguishes the XBox brand from competitors like Sony and Nintendo is a focus on making video games accessible to people with disabilities. 

“Microsoft has been very supportive when it comes to accessibility,” says Peña, citing the recently released Forza Horizon 5 racing game, an XBox exclusive title, as an example.

The game can be customized with high-contrast colors or color-blind options intended for players with sight impairments, or set to run at a reduced speed, which gives players more time to react to the high-speed action.

Microsoft says it will also soon allow people with hearing impairments to play the game with on-screen interpreters for American or British Sign Language. 

“They’re the one the company has been doing the most out of every other company out there right now,” says Peña. “I have family members that – they’re deaf, you know, and now they could also play the game and have that same experience that I have… I think that’s very, very important.”

At an anniversary event on Monday – which also featured a cameo from The Rock – Microsoft announced it would start allowing gamers to try out a beta version of the upcoming Halo: Infinite a few weeks early, ahead of the game’s release early next month. But not all of those gamers will be standing in line outside retailers awaiting its release, as many Halo fans in the past have done. Recent XBox consoles, like the current “Series S” and a version of the high-end “Series X,” don’t feature disk drives. Instead, Microsoft has been pushing digital game downloads and even streaming games via xCloud. Peña says that could give us a hint as to the future of the console.

“Without buying the physical version, they can just play it through their phone, through their smart TVs – I could definitely see that.”

Listen to ABC’s Mike Dobuski take a look back at 20 years of XBox:

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(SAN JOSE, Calif.) — Federal prosecutors have rested their nearly 11-week case against Elizabeth Holmes, the former Theranos CEO accused of misleading investors to bankroll her one-time multibillion-dollar Silicon Valley start-up despite no evidence its blood-testing technology could perform as promised.

“The United States rests,” Prosecutor Jeff Schenk told the court Friday morning.

Holmes’ defense team is expected to call witnesses before the case goes to the jury. She was charged with 10 counts of wire fraud — one of which was dropped — and two counts of conspiracy to commit wire fraud.

The 37-year-old faces decades in prison if convicted. She has pleaded not guilty to all charges related to Theranos, which received hundreds of millions of dollars from investors by claiming its breakthrough technology could quickly diagnose a variety of diseases from a few drops of human blood.

The government called 29 witnesses to the stand, starting in early September, including former U.S. Defense Secretary James Mattis, a former Theranos board member who said he was in the dark about the technology’s shortcomings.

Prosecutors also questioned investors, including white-shoe lawyer Dan Mosley, whose long-time client Henry Kissinger was on the Theranos board and introduced him to Holmes. Mosley personally invested $6 million and put Holmes in touch with many of his wealthy clients, such as the Waltons, the family behind Walmart; the Coxes, the billionaires behind Cox Enterprises; and the DeVoses, the Amway heirs and family of former Secretary of Education Betsy DeVos.

Jurors also heard from former Theranos employees who gave insight into the company’s labs and other dealings, and patients who described receiving purportedly inaccurate Theranos test results after getting blood drawn at various Walgreens locations.

Prosecutors concluded their case with testimony from journalist Roger Parloff, who wrote a 2014 cover story on the ascending Silicon Valley CEO for Fortune Magazine.

ABC News spoke to Parloff for “The Dropout” podcast in 2019.

“I got caught up in this woman’s story,” Parloff told ABC News at the time. “I began to drink the Kool-Aid. … I think I asked the right questions. I just got the wrong answers.”

The reporter recorded around 10 hours of interviews with Holmes, excerpts of which the government played in court on Thursday.

Santa Clara Law Professor Ellen Kreitzberg, who has sat through much of the trial, said the government likely ended with Parloff because his article was seen by many of the investors, and the jury got to hear the statements Holmes made to him in her own voice.

“That can be very powerful,” Kreitzberg said.

It’s unclear whether Holmes will testify. Kreitzberg said the defense likely will think “long and hard” before offering her up as a witness.

“From a lawyer’s perspective, I just can’t imagine that they want to put her on the stand,” she told ABC News. “There are too many questions and documents that are not easily explained.”

ABC News’ Victoria Thompson and Taylor Dunn contributed to this report.

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(NEW YORK) — Walmart, Target and Macy’s say they are finding ways to bring products to shelves in time for the holiday season even though supply chain issues are still impacting the economy and other companies.

All three companies boasted strong numbers and good sales in their respective third quarter earnings calls this week. The news comes at a time when some U.S. ports are still congested and warehouses are stuffed to the brim.

There are signs of progress, with imports down about 25% at the port of Los Angeles, the port’s executive director, Gene Seroka, said Tuesday. However, there are still tens of thousands of empty cargo containers that need to be moved from the port, continuing delays.

The remaining vessels in port are mostly smaller and belong to a mix of retailers both large and small, Phillip Sanfield, director of media relations for the Port of LA, told ABC News.

The Biden administration last month announced that the port would begin running 24 hours a day, but that has yet to happen. Nevertheless, big retailers are predicting a successful holiday season.

“The holiday season is here, and we’re ready,” said Walmart CEO Doug McMillon. “We continue to have momentum. Sales were strong throughout the third quarter and we’ve seen a good start to the fourth quarter.”

Walmart said that its U.S. inventory is up 11.5% ahead of the holiday season as it was able to meet customer demand. Similar sentiments were echoed by Macy’s, as the company also discussed its response to the ongoing logistics crisis.

“We don’t expect to be materially impacted by supply chain issues during the critical holiday shopping season,” Jeffrey Gennette, Macy’s CEO, said on an earnings call this week.

How are they doing it?

These retailers seem to be side-stepping supply chain woes by rerouting ships to less-used ports, hiring new workers, unloading cargo during off-hours and switching to airfreight in some cases.

“We’re adding more than 30,000 permanent positions across our supply chain network to support the growth we expect to continue delivering in the fourth quarter and beyond,” said Brian Cornell, chairman and CEO of Target. “The team continues to work around significant port delays, diverting shipments to less-congested entry points and relying on airfreight in certain cases.”

Walmart is also rerouting deliveries; the company is adding extra lead times to orders and chartering their own ships.

These companies may be outrunning supply chain issues, but experts say that’s because they can afford the extra cost.

“I think that just with all the disruption that we’ve had, we’ve realized how quickly we can pivot and come up with new solutions. Sometimes those new solutions are expensive,” said Brandon Isner, head of retail research at CBRE, an American commercial real estate services and investment firm. “It’s true that bigger, mass-market retailers, they’re using their clout with carriers and suppliers to acquire as much product as possible in advance of the holiday season.”

Can other companies manage to do the same?

Many of these solutions, according to Isner, are too expensive and not cost-effective for smaller businesses. The options for creating a new supply chain from producer to consumer becomes easier as pockets get deeper and economies of scale get larger.

“They [larger retailers] have the ability to reroute profits to make sure they get delivery where smaller institutions don’t necessarily have that type of logistics capabilities,” said Steven Ricchiuto, U.S. economist for bank-holding company Mizuho.

In one example, Ricchiuto said a large retailer may opt to transport their items differently to avoid supply chain clogs.

“Typically putting freight on airplanes is more expensive than putting it on boats,” said Ricchiuto. “But in an environment in which you are restricted on one side of the equation and prices have gone up enough, suddenly it becomes more realistic to go the more expensive route.”

Could inflation help the supply chain?

All of this comes at a time when the U.S. economy is experiencing abnormal levels of inflation — the highest in 30 years.

“I do think that these production issues are getting themselves worked out, in part because of higher prices,” said Gus Faucher, the chief economist of PNC Financial Services. “Higher prices give businesses an incentive to sell more to consumers, so not only do they have higher values for volumes, but they’re getting more for their services and goods that they sell.”

Higher prices due to inflation may seem like an unlikely savior in fixing supply chain issues, but the rising costs present challenges as well.

“The cost of their workforce is up, the costs of getting products there is up, energy costs are up,” said Isner. “Some retail executives say that, ‘Yes, they’re definitely going to pass costs onto the consumers,’ but others have said, ‘No, they’re just going to eat the costs.’ … We can probably make an educated guess that it’s the larger companies.”

For retail shoppers and American families, all of this signals a warm welcome to the holiday season, according to the Biden administration.

“In short, families have seen an increase in real disposable income, and stores and restaurants have the supplies to drive this recovery,” Brian Deese, the director of the White House’s National Economic Council, said Tuesday.

“Today’s data show that even as we work to address the real challenge that elevated inflation from supply chain bottlenecks poses from Americans’ pocketbooks and outlook, the economy is making progress,” Deese said in response to Walmart’s successful third quarter and forecast for the holiday season.

Economists say the American supply chain could look different once the country emerges from the pandemic in a growing economy. Even though prices are more stable at larger retailers, there could be a rise across the board as the economy continues to heat up.

“We’re going to be looking more and more for alternative paths and alternative distribution systems at the end of the day. We’re going to wind up with a much more complex network,” said Ricchiuto. “Does that mean we’re going to pay a higher cost? To some extent we are, and we’re going to pay them permanently.”

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